CORESTATE has set up Stadtquartiere I, a new open-end special AIF. This fund is the first of its kind in Germany for institutional investors and thus a pioneer in the promising city quarter asset class. Investments are focused on relevant urban developments in the centre of medium-sized and large cities in Germany, which enhance and determine the quality of the respective location. Corestate is aiming to achieve a target volume of around € 500 million. Hannover Leasing, an in-house investment management company, is responsible for managing the fund.
Frankfurt, 11 February 2021, CORESTATE Capital Holding S.A. (Corestate), a leading independent real estate investment manager in Europe, has set up Stadtquartiere I, a new open-end special AIF. This fund is the first of its kind in Germany for institutional investors and thus a pioneer in the promising city quarter asset class. Investments are focused on relevant urban developments in the centre of medium-sized and large cities in Germany, which enhance and determine the quality of the respective location. Corestate is aiming to achieve a target volume of around € 500 million. Hannover Leasing, an in-house investment management company, is responsible for managing the fund.
Nils Hübener, CIO of Corestate: “Ten years ago, Corestate was a trailblazer in a new asset class, micro living, which laid the foundations for a success story for institutional investors throughout Europe that continues to this day. Now we see similar potential with city quarters here in Germany, which is why we want to take a leading role in developing this market at this early stage. With our wealth of expertise in the residential, office and retail asset classes, as well as with mixed-used real estate, we have the tools to successfully open up this growth market.“
Segment with long-term stability|Attractive for ESG-focused investors|€ 200 billion market
Corestate estimates that the market for modern city quarters in Germany is worth approximately € 200 billion, which is why the company is expanding its investment focus on these areas with the new funds and planning to further intensify its activities in this core segment. The challenges presented by the coronavirus crisis have shown that an asset class with long-term stability such as city quarters is particularly appealing to ESG-focused investors. Corestate firmly believes that demand will remain high and is looking to launch further products this year.
Charles Smith, Head of Key Clients at Corestate: “City quarters are growing in importance, primarily on the back of rising demand for new, high-quality residential properties that meet sustainability criteria or for innovative conversions of existing real estate. Unlike Corestate’s conventional residential funds, our new city quarter fund can also acquire properties for its portfolio that contribute to providing functionality or enhancing value in city quarters, such as childcare facilities, retail areas or office space, alongside residential real estate. That being said, the fund has a clear focus on residential real estate.”
€ 150 million pipeline|Special valuation system secures location quality
The fund’s current pipeline includes assets worth approximately € 150 million, located in medium-sized and large cities in Germany. Corestate uses an internal valuation system to select locations, ensuring that only cities that achieve a defined minimum score in the social and economic parameters qualify for the fund. This approach is geared towards taking into account the high standards of location criteria that are particularly important in this asset class. Corestate aims to achieve an average annual return of more than 4% at a maximum debt ratio of 50%. Capital commitments of € 120 million have already been received and the fund remains open to further investment.
About CORESTATE Capital
CORESTATE is an investment manager and co-investor with around € 28 billion in assets under management. The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanisation, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At CORESTATE, all concepts are supported with ESG expertise that is unique to the industry. With some 800 experts, CORESTATE offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. CORESTATE is listed on the Frankfurt Stock Exchange (SDAX) and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 13 countries across Europe, with offices in Frankfurt, Vienna, Zurich, Paris, Madrid and London.
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